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Paths Of Income Convergence Between Country Pairs Within Europe

Author

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  • Mirjana Gligoric
Abstract
This paper explores income convergence in European countries. Unlike previous research, the analysis is based on the pair-wise approach (Pesaran, 2007), identifying four cases: long-run convergence, catching-up, lagging-behind, and divergence. The results suggest that catching-up prevails, while no significant evidence was found for the existence of long-run convergence at the whole sample level. Still, three convergence clubs appear that consist of countries recording long-run convergence, two in transitional countries and one involving advanced countries, which indicate the similar growth model of the countries belonging to each club. Nevertheless, the results do not allow us to claim with certainty that the income paths of the club members will not exhibit systematic tendencies toward divergence or changes in membership in future.

Suggested Citation

  • Mirjana Gligoric, 2014. "Paths Of Income Convergence Between Country Pairs Within Europe," Economic Annals, Faculty of Economics and Business, University of Belgrade, vol. 59(201), pages 123-156, April – J.
    • Handle: RePEc:beo:journl:v:59:y:2014:i:201:p:123-156
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    References listed on IDEAS

    as
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    Cited by:

    1. Dyba Wojciech & Loewen Bradley & Looga Jaan & Zdražil Pavel, 2018. "Regional Development in Central-Eastern European Countries at the Beginning of the 21st Century: Path Dependence and Effects of EU Cohesion Policy," Quaestiones Geographicae, Sciendo, vol. 37(2), pages 77-92, June.
    2. Michal Bernardelli & Mariusz Prochniak & Bartosz Witkowski, 2017. "The application of hidden Markov models to the analysis of real convergence," Dynamic Econometric Models, Uniwersytet Mikolaja Kopernika, vol. 17, pages 59-80.

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    More about this item

    Keywords

    European countries; Long-run Convergence/Catching-up/Lagging-behind/Divergence; Convergence Clubs; Time-series and Pair-wise Approach; Panel Analysis;
    All these keywords.

    JEL classification:

    • O47 - Economic Development, Innovation, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - Empirical Studies of Economic Growth; Aggregate Productivity; Cross-Country Output Convergence
    • C32 - Mathematical and Quantitative Methods - - Multiple or Simultaneous Equation Models; Multiple Variables - - - Time-Series Models; Dynamic Quantile Regressions; Dynamic Treatment Effect Models; Diffusion Processes; State Space Models
    • O11 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Macroeconomic Analyses of Economic Development
    • O52 - Economic Development, Innovation, Technological Change, and Growth - - Economywide Country Studies - - - Europe

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